Going With the Cash Flow

So you've never focused on free cash flow? The Osterweis Fund has topped the mid-cap blend average by nearly 400 basis points for the past decade by focusing on this all-important performance yardstick.

Calling free cash flow "the best measure of corporate profitability," Osterweis has steered his Osterweis Fund to a 14.76% annualized return over the past 10 years, while the average mid-cap blend fund has returned 10.75%.

Osterweis, who graduated from Bowdoin with a degree in philosophy, does have some philosophical differences with typical mid-cap funds. For...